Car dealers are feeling the pinch of factory shutdowns in Japan

The earthquake in Japan is having a ripple effect around the world. I just came from our car dealership. The salesman said they will run out of cars for sale before the end of May. This is a direct consequence of production shutdowns in Japan as a result of the devastation caused by the earthquake. We’re also not just talking about Japanese manufacturers, but also North American car makers. It is hitting all industries.

There is obviously a business continuity impact from the earthquake. Could manufacturers have foreseen this impact? No doubt, but this is also a much larger event than, say, a single factory fire disrupting a global supply chain. Manufacturers obviously had limited stocks of parts and components when the earthquake hit, and they have now worked their way through these.

This shows more than global interdependence. It also shows just how vulnerable manufacturers throughout the world can be to integrated supply and logistics chains.